ON / OFF HIRE STATEMENT

Documents are very important in a company. As company archives, some of the documents also legally binding, like the On / Off Hire Statement as one of the commercial document. Basically, this document is a letter of notification and agreement of both parties (BLT Chembulk as a vessel owner with a third party which in this context is the charterer or the party who had rented our boat).

What is On / Off Hire Statement?
On-hire statement is a letter of agreement between both parties (owner and charterer), which contains detailed description of Remain Of Board Bunkers (ROB) MFO, MDO, MGO, Lubes Oil and another important thing is the actual data (date and hour).

The opposite of on-hire, off-hire statement issued when the charterer returns the ship hired to the owner. This could be due to the contract had expired or completed, or perhaps there is agreement are violated.

Both documents are signed by the master on behalf of the owner and also representatives from the charterer. In one period of the charter, On / Off Hire Statement can be re-issued in between. This happens because of temporary stoppage due to technical problems. Therefore, it’s critical to distinct initial on-hire and the next one. To be precise, Initial On-Hire when first handed over to charters is called Delivery Statement, whereas subsequently called On-Hire Statement. While the last and final off hire when vessel delivered back to owner is called the Redelivery Statement. This is very important in order to prevent any misunderstandings.

Like other trade / commercial agreements document, this On / Off Hire Statement could lead to potensial claims if not done properly that company could suffer financial loss. Because of drafted by external parties (charterer), we, especially those representing the owner to sign the letter should be more diligent / careful before approving and signing. Here are some tips before signing the Delivery / Redelivery (On / Off Hire Statement):

1. Read the statement
In practice, the charterer will present their own draft of On / Off Statement for Master to sign. Nonetheless an agreement is only done if both Master for and on behalf of owner and charterer’s representative sign the statement. If Master has any doubt about the content (quantity, wording, sentences, etc) can contact the PIC in the office for their approval or discuss with the charterer to amend / change the wording and both.

There must be no word or sentence that is not understood or missing. Check the whole On / Off Hire Statement, especially on the date of delivery and redelivery are usually listed at the top. We have a separate draft that we show to Master and charterer. So they know the standard form of On / Off Hire Statement. Later, Master, as executor, which approved the contents of the letter should remain observant to see and read the letter that offered, to prevent bad impact to the company.

2. Understand the contents of those documents, not to arise confusion or redundant data.

On / Off Hire Statement should contain statement that the charterer has received a ship chartered by a certain data with a cargo that has been measured by a surveyor, while in the On / Off Hire Statement, stated that the vessel has been returned to the owner on the date mentioned. However, in practice, the document are often found overdone which some date contains is not needed, and even more lead to ambiguity and misinterpretations.

For example, in the On / Off Hire Statement which was signed in early February. In the letter, stated that:
Master, On Behalf of the vessels owner is satisfied and accepts the condition of the vessel is the same prior to On Hire this statement will from release charterer from any what’s ever responsibility and obligation to this vessel

In On / Off Hire Statement or document other agreements, there can be no statement that contains arguments or neither guarantee the quality of the goods being leased or sold. That should be listed only facts, not argument or opinion.

In addition, the most visible deviate from the standards and objectives of the signing of this letter is, who claimed to have received the vessel should be the charterer, not the Master.

Probability, the charterer is over cautious and play safe, to draft the statement that way. Whereas the provisions and responsibilities of both parties have already stated in the charter party. No need to insert in this letter. Should the Master be more careful and read over and over before signing it, because the sentence is most likely can be easily misinterpreted.

3. Get used to establish good coordination between the Master with the operation staff.

However, the approval and signing of the document must be based on mutual consent. Master can not just sign it. Each letter of proffered must be known by the vessel operation. Then checked again, whether the document could be signed. If there are errors or content that is not appropriate, we can reject or ask to be revised.

Good cooperation is the key to mutual success. For that, staff are expected can always keep communications running in collaboration with synergistic.